Introduction
The United Arab Emirates and Australia entered a new phase of economic cooperation with the implementation of the Comprehensive Economic Partnership Agreement (CEPA) on 1 October 2025. This landmark agreement represents Australia’s first trade deal with a country in the Middle East and North Africa region, while marking a strategic milestone in the UAE’s broader economic diversification program.
The agreement was signed on 6 November 2024 by Australian Minister for Trade and Tourism Don Farrell and UAE Minister of Foreign Trade Dr. Thani bin Ahmed Al Zeyoudi, following rapid negotiations that commenced in December 2023 and concluded in September 2024. The swift negotiation timeline reflected the strong commitment from both governments to deepen their economic relationship and create new opportunities for businesses and investors.
Background of UAE-Australia Economic Relations
The UAE stands as Australia’s largest trade and investment partner in the Middle East. Prior to the CEPA, bilateral trade reached USD 12.3 billion in 2024, with two-way investment stock valued at USD 23.7 billion. Approximately 300 Australian companies were already operating across various sectors in the UAE market, establishing a foundation for expanded economic engagement.
The relationship has shown consistent growth in recent years. Non-oil trade between the two nations demonstrated significant momentum, with the first nine months of 2025 recording USD 4.3 billion, representing a 32.4 percent increase compared to the same period in 2024. This growth trajectory underscored the potential for further economic integration through a formal trade agreement.
The UAE’s strategic location at the intersection of global trade routes between East and West, combined with its advanced infrastructure and business-friendly environment, positioned it as an attractive partner for Australian exporters and investors. Australia, with its abundant natural resources, advanced services sector, and technological capabilities, offered complementary strengths that aligned with UAE’s diversification objectives.
Aims of the CEPA
The CEPA was designed with several strategic objectives that address the economic priorities of both nations. The primary aim is to enhance bilateral trade flows by eliminating tariff barriers and improving market access for goods and services. Under the agreement, over 99 percent of Australian goods exports to the UAE by value become tariff-free upon full implementation, creating immediate cost advantages for Australian exporters.
Beyond tariff reduction, the agreement seeks to promote investment, innovation, and technology transfer across key sectors. This includes establishing frameworks that support increased cross-border investment and deeper economic cooperation in areas such as renewable energy, digital infrastructure, advanced manufacturing, and professional services. The CEPA creates clear pathways for collaboration that extend beyond traditional trade in goods.
The agreement also aims to support diversification of trade and export-driven growth for both economies. For Australia, CEPA represents a major step toward reducing dependency on traditional markets and opening new export destinations in a strategically important region. For the UAE, the deal supports the country’s broader ambition to diversify its economy away from oil dependence and strengthen its position as a global trade hub.
Another important objective is to strengthen the UAE’s role as a logistics and re-export center. The agreement provides Australian exporters with privileged access not only to UAE consumers but also to the broader Middle East, North Africa, and South Asia region through the UAE’s extensive global trade networks.
Key Features of the CEPA
The CEPA contains 26 chapters covering a comprehensive range of trade and economic cooperation topics. The agreement goes well beyond traditional free trade agreements by incorporating modern provisions on digital trade, sustainable development, and inclusive economic growth.
Tariff Elimination and Goods Trade
The centerpiece of the agreement is the near-complete elimination of tariffs on Australian goods entering the UAE market. Most tariffs were removed immediately upon entry into force on 1 October 2025, with remaining tariffs phased out over three or five-year periods. This broad liberalization covers agricultural products including dairy, red meat, wine, canola seeds, grains, pulses, horticulture, and honey. Industrial goods benefiting from tariff elimination include aluminium and aluminium products, vehicle parts, pharmaceuticals, cosmetics, jewellery, and gold.
The agreement adopts modern and flexible rules of origin that cover goods made in UAE free zones and allow for bilateral accumulation of originating materials. These provisions ensure that businesses can efficiently structure their supply chains to take advantage of preferential treatment.
Services Liberalization
CEPA includes comprehensive commitments covering more than 120 services sectors and subsectors in the UAE market, representing 60 more sectors than the UAE committed to under World Trade Organization agreements. The agreement establishes guaranteed market access for Australian service providers in professional services (including legal, accounting, architectural, medical, dental, and veterinary services), business services (advertising, management consulting, scientific and technical consulting), financial services, health services, education services, communication and audiovisual services, distribution services, environmental services, and tourism and travel-related services.
The UAE’s commitments under CEPA lock in foreign equity caps up to 100 percent in a range of sectors and subsectors, providing certainty for Australian firms seeking to establish operations in the UAE. The agreement also includes provisions for business mobility, allowing intra-corporate transferees to work in the UAE for up to three years, business visitors to stay for up to three months annually, and contractual service suppliers to work for up to three months.
Investment Facilitation and Protection
The CEPA package includes both an Investment Facilitation Chapter and a separate Agreement on the Promotion and Protection of Investments. The Investment Facilitation Chapter highlights priority areas for cooperation, including encouraging investment in decarbonization, clean technologies, and partnerships with First Nations peoples. It also establishes mechanisms for organizing joint investment promotion activities and facilitating cooperation between government agencies.
The Investment Agreement provides substantive protections for investors, including prohibitions on denial of justice, fundamental breaches of due process, manifest arbitrariness, targeted discrimination, and abusive treatment. It includes commitments on non-discrimination between local and foreign investors, protection against expropriation except for public purposes with proper compensation, and guarantees for transfers of capital and profits. The agreement also prohibits certain performance requirements such as export targets or domestic content requirements.
Five Memoranda of Understanding accompany the CEPA, covering priority sectors for investment cooperation: green and renewable energy, data centers and artificial intelligence projects, minerals and mining, food and agriculture, and infrastructure development. These MOUs provide practical frameworks for government agencies and private sector stakeholders to promote investment in these strategic areas.
Digital Trade and Technology
The CEPA brings coherence to the evolving digital trading landscape with provisions covering electronic documents, e-signatures, e-invoicing, and e-payments. The agreement includes a permanent prohibition on customs duties on electronic transmissions and seeks to minimize impediments to cross-border data flows while maintaining government regulatory authority for legitimate public policy objectives.
Provisions on protecting source code and cryptographic secrets help guard sensitive business information. The agreement includes rules on personal information protection, consumer protection, and limiting unsolicited commercial electronic messages. Commitments on open internet access, open government data, online safety and security, and sharing experiences in digital government promote digital governance.
Government Procurement
For the first time, Australian suppliers gain guaranteed access to the UAE’s government procurement market at the federal level. The CEPA sets out a comprehensive framework with specific thresholds and covered entities, allowing Australian businesses to bid on competitive opportunities for goods, services, and construction projects. This access positions Australia as one of a small number of countries able to participate in UAE government tenders.
Intellectual Property
The agreement complements existing international principles and standards for the treatment, protection, and enforcement of intellectual property rights. These provisions create a stable environment for creative industries, technology companies, and innovation-driven businesses to operate with confidence in both markets.
Sustainable Development and Inclusive Growth
CEPA breaks new ground with dedicated chapters addressing sustainable development concerns. The Environment and Transition to Net Zero chapter establishes a comprehensive framework integrating environmental protection with trade and investment, emphasizing the transition to net zero emissions by 2050. The agreement promotes cooperation on climate change, circular economy practices, renewable energy, and sustainable resource management.
The Trade, Gender Balance and Women’s Economic Empowerment chapter emphasizes collaboration to promote women’s full participation in the economy, leadership, entrepreneurship, and safe workplaces. The Trade and Labour chapter integrates labour considerations into the trade environment, fostering stable, productive, and inclusive workforce development.
First Nations Trade and Investment
CEPA contains the first standalone chapter in an Australian trade agreement dedicated to trade and investment economic cooperation with First Nations and Indigenous peoples. This chapter creates clear channels for collaboration, allowing Indigenous enterprises to build networks, enter supply chains, and access new market opportunities while ensuring respect for indigenous peoples’ rights and recognizing their unique contributions to trade and investment.
Support for Small and Medium Enterprises
Recognizing that small and medium-sized enterprises (SMEs) are engines of job creation and drivers of competitiveness, CEPA includes commitments to cooperate in reducing barriers, sharing best practices, and supporting under-represented groups to access global markets and digital trade. Both parties maintain open websites with key CEPA information, links, and practical guidance on customs, investment, and business rules to help SMEs benefit from the agreement.
Transparency and Governance
The CEPA establishes a legal and institutional framework ensuring effective implementation through a streamlined committee structure. This includes designated focal points, a joint committee, and subcommittees that meet regularly to manage different aspects of the agreement. The second Joint Economic Committee meeting was held in Dubai in January 2026, co-chaired by the trade ministers from both countries, to explore trade and investment opportunities and address obstacles to bilateral commerce.
The agreement includes robust state-to-state dispute settlement mechanisms, starting with consultation and moving to panel adjudication if necessary, while maintaining the ability to reach mutually amicable solutions at all stages. Provisions on transparency and anti-corruption affirm commitments to promptly publishing laws and regulations, notifying trading partners of major legislative changes, and preventing corruption and bribery in trade and investment matters.
Impact and Benefits for the UAE
The CEPA delivers substantial and multifaceted benefits for the UAE economy, businesses, and consumers. These benefits align with the UAE’s strategic economic objectives and contribute to the country’s ongoing transformation.
Enhanced Trade Opportunities
The agreement is projected to elevate annual bilateral trade from USD 4.2 billion in 2024 to over USD 10 billion by 2032. In the first half of 2025, the UAE’s non-oil foreign trade with Australia reached USD 3.03 billion, representing a 33.4 percent year-on-year increase. This growth trajectory demonstrates the immediate positive impact of the agreement on trade flows.
The CEPA reduces unnecessary barriers to trade and facilitates greater market access for UAE goods and services in the Australian market. UAE exporters gain improved access to a developed economy with high purchasing power and demand for quality products and services.
Strengthened Food Security
For a market where domestic production is limited by climate and water constraints, the CEPA directly enhances food security by providing reliable, cost-competitive access to Australian agricultural products. The tariff-free environment for dairy, meat, grains, pulses, and horticulture creates predictable supply chains and reduces exposure to global price volatility. This aligns with national food security strategies and helps ensure stable, diverse import streams.
Investment Attraction and Economic Diversification
The investment facilitation framework and bilateral investment agreement create an attractive environment for two-way productive foreign direct investment. Priority sectors identified in the five MOUs align precisely with UAE’s economic diversification priorities: green and renewable energy supports the transition to net zero emissions; data centers and artificial intelligence projects enhance digital infrastructure capabilities; minerals and mining sector cooperation provides access to critical resources; food and agriculture investment improves supply chain resilience; and infrastructure development supports continued expansion of world-class facilities.
The agreement provides confidence for institutional and private investors through clear protections and regulatory transparency, improving the viability of large-scale project development. The expectation is that CEPA will catalyse new joint ventures across renewable energy projects, hydrogen production, climate-tech solutions, sustainable agriculture systems, and high-tech manufacturing.
Access to Australian Services and Expertise
The comprehensive services liberalization provides UAE businesses and consumers with access to high-quality Australian professional services, financial services, educational services, health services, and technical expertise. This supports the UAE’s knowledge economy development and provides opportunities for skills transfer and capacity building in strategic sectors.
Technology Transfer and Innovation
The digital trade provisions, intellectual property protections, and innovation-focused investment frameworks facilitate technology transfer and collaborative research and development. Australian companies bringing advanced technologies, innovative business models, and specialized expertise to the UAE market contribute to the country’s innovation ecosystem and technological advancement.
Consumer Benefits
UAE households and businesses benefit from increased competition and lower costs resulting from tariff elimination. Greater product variety and competitive pricing in Australian goods create value for consumers across multiple sectors.
Regional Hub Positioning
The CEPA reinforces the UAE’s position as a global logistics, transport, and re-export hub. By formalizing trade ties with a major resource-rich economy, the UAE strengthens its credentials as a strategic location for companies seeking to serve regional and international markets. The agreement enhances the UAE’s attractiveness as a business base for Australian companies targeting the broader Middle East, North Africa, and South Asia region.
Support for UAE’s CEPA Strategy
The Australia CEPA is one of 32 comprehensive economic partnership agreements concluded by the UAE to date, forming a cornerstone of the country’s economic strategy. This network of agreements targets USD 1 trillion in total trade value by 2031 and aims to double the size of the UAE economy to exceed USD 800 billion by the same year. Each agreement contributes to expanding market access for UAE businesses globally and attracting foreign investment across priority sectors.
The UAE-Australia Comprehensive Economic Partnership Agreement represents a transformative development in the bilateral economic relationship between two strategically important partners. By eliminating tariffs on virtually all goods trade, opening services markets, facilitating investment, protecting intellectual property, and establishing frameworks for cooperation in emerging sectors, the agreement creates comprehensive opportunities for economic growth and development.
For the UAE, CEPA delivers immediate benefits through enhanced trade volumes, improved food security, and increased consumer choice, while supporting longer-term strategic objectives of economic diversification, innovation development, and global hub positioning. The agreement provides UAE businesses with preferential access to the Australian market, attracts investment in priority sectors aligned with national development goals, and strengthens the country’s network of international economic partnerships.
The comprehensive nature of the agreement extends beyond traditional trade concerns to address contemporary challenges and opportunities in digital commerce, sustainable development, gender equality, indigenous economic participation, and small business support. This forward-looking approach ensures the agreement remains relevant and beneficial as economic conditions evolve.
Early indicators suggest strong momentum in implementing the agreement. The second Joint Economic Committee meeting in January 2026 demonstrated active engagement from both governments in identifying opportunities and addressing practical challenges. Trade data showing significant growth even in the early months following implementation confirms business responsiveness to the new opportunities.
The success of CEPA will ultimately depend on effective utilization by businesses, investors, and other stakeholders in both countries. Government efforts to promote awareness, provide practical guidance, and facilitate connections between business communities play an important role in maximizing benefits. The agreement establishes the framework, but private sector initiative drives the realization of its full potential.
As the UAE continues building its network of comprehensive economic partnership agreements globally, the Australia CEPA serves as an important model demonstrating how modern trade agreements can address both immediate commercial interests and long-term strategic economic objectives. The agreement positions both nations to capitalize on complementary strengths and pursue shared prosperity in an increasingly interconnected global economy.
